Shenzhen Laidian Technology Co., Ltd. v. Shanghai Zhixiang Technology Co., Ltd.

China IP,[Patent]

 

Lower Court Docket No.: 92656, first instance (初), civil case (民), (2018) Shanghai Pudong New Area People's Court (沪0115)

Docket No.: 22, second instance (终), civil case (民), (2020) Shanghai Intellectual Property Court (沪73)

SUMMARY OF THE ARGUMENT

When an employee of a company releases information that infringes on the rights and interests of a competitor of the company through WeChat Moments, the information so released cannot be considered as having only personal socializing properties just because it is released in WeChat Moments. Instead, the audience of the employee's social media account, the specific content and beneficiary of the information, and whether it is related to the will of the company should be taken into integrated consideration to decide whether it has constituted an in-job conduct.

STATEMENT OF THE CASE AND FACTS

Defendant-Appellant: Shenzhen Laidian Technology Co., Ltd. ("Laidian") and Wang Weiwei

Plaintiff-Appellee: Shanghai Zhixiang Technology Co. Ltd. ("Zhixiang") and Zhixiang Technology (Shanghai) Co., Ltd. ("Zhixiang Technology")

Defendant: Fujian Yalalat Internet Technology Service Co., Ltd. ("Yalalat")

Zhixiang and Zhixiang Technology were the operators of “Energy Monster” shared power banks; Laidian was the operator of "Laidian" shared power banks; and Wang Weiwei was a salesperson of Laidian. In addition to posting information about her personal life, Wang Weiwei also posted a lot of promotional content related to Laidian in her WeChat Moments, of which, Wang Weiwei posted on July 21, 2018 information that said, "Noah's Ark Bar Group carried out testing of major power bank brands on the market, and Laidian is confident enough to face all kinds of safety testing ... Monster power bank does not work ... It is the proudest thing for us in Laidian", with related pictures, showing that the test result of a certain institution on "Monster" power banks had shown "quality problem", and a certain company group had therefore prohibited to work with "Monster" power banks. The Plaintiff believed that the above-mentioned content had constituted commercial defamation and false publicity, while Wang Weiwei's behavior was an in-job conduct, so Laidian and Wang Weiwei should share joint responsibilities.

The Pudong Court held that WeChat Moments was not purely a private socializing networking place, but also had other various functions such as marketing and information dissemination. Whether the act of Wang Weiwei releasing the accused information on her WeChat Moments was an in-job conduct or not was dependent on whether she had released such content for the implementation of work tasks, and it could be comprehensively determined by taking into combined consideration the nature of Wang Weiwei's WeChat Moments, and the specific accused content of the post, etc.

First, judging from Wang Weiwei's entire WeChat Moments, she had released a lot of marketing content about Laidian and its shared power banks, in addition to content related to her personal life. It could be seen that the relevant audience of her WeChat Moments included the customers or potential customers of Laidian. As a salesperson of Laidian, Wang Weiwei had published the above content in order to fulfill his duties as a salesperson and for the benefit of Laidian. Therefore, Wang Weiwei's WeChat Moments was not only a space for sharing personal life but also a place for marketing for Laidian.

Second, judging from the source of the accused content, the Defendant Wang Weiwei claimed to have obtained it from a WeChat group of shared power bank practitioners. As a salesperson, Wang Weiwei had joined a WeChat group of practitioners of the industry the company was in, and edited the industry-related information obtained from the group and released it to her WeChat Moment, which was unlikely to be for personal life purposes.

Also, from the specific expression of the accused content, it had directly involved the comparison and analysis of the products of the Plaintiff and the Defendant, indicating to the audience that the products of the Plaintiff had quality problems while those of the Defendant were of excellent quality. The content was not related to Wang Weiwei's personal affairs, in which Wang Weiwei did not have a direct personal interest, but would bring certain competitive benefits to Laidian.

Therefore, it can be concluded that Wang Weiwei's posting of the accused content was an in-job conduct on behalf of Laidian, who should bear the corresponding responsibilities. As a salesperson of a competitor in the same industry, Wang Weiwei had published content which negatively evaluated the quality of the Plaintiff's products and indicated that the Defendant's products were superior to other competitors, without evidence or basis, and without any investigation or verification, which had constituted business disparagement and false publicity. The Defendant, Laidian, was thus ordered to pay the Plaintiff a compensation of RMB 120,000 and eliminate the adverse impact.

After the first instance judgment, the Defendants, Laidian and Wang Weiwei, appealed to Shanghai Intellectual Property Court. In the second instance, Shanghai Intellectual Property Court dismissed the appeal and upheld the original judgment.

ANALYSIS

This case involves the determination of commercial disparagement committed by employees of a company through their personal social media accounts. WeChat Moments has now become an important channel for information dissemination, and a considerable number of operators have used WeChat Moments as a marketing place to release promotional content. From the perspective of content, WeChat Moments is not limited to the social sharing of personal life among specific subjects, but has already had the dual properties of personal socialization and market operation. When an employee of a company releases information that infringes on the rights and interests of a competitor of the company through WeChat Moments, the audience of the employee's social media account, the specific content and beneficiary of the information, and whether it is related to the will of the company should be taken into integrated consideration to decide whether it has constituted an in-job conduct.

In this case, the WeChat Moments of the Defendant, as an employee of Laidian, was not only a space for sharing personal life but also a place for marketing for the company. The accused content the employee has released was also not related to her personal affairs, nor has she enjoyed direct personal benefits from it. Therefore, it can be concluded that her posting of the accused content was an in-job conduct on behalf of the company, who should bear the corresponding responsibilities. Market operators should be impersonal, neutral and cautious when making critical comments about their competitors, and their freedom of speech should be more restricted than that of ordinary consumers and the news media.

This case has been selected as a "Typical Case of Shanghai Pudong Court for the Judicial Protection of Foreign-Related Intellectual Property Rights". 

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